'Investigating Agency Has No Power To Debit Freeze Bank Account U/S 106 BNSS': Bombay High Court

The Bombay High Court has held that an investigating agency has no authority to debit freeze or attach a bank account under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The Court observed that Section 106 merely empowers the police to seize property for the purpose of investigation, whereas attachment of proceeds of crime can be effected only under Section 107 upon an order of the Magistrate.

A division bench of Justices Anil L. Pansare and Raj D. Wakode was hearing a batch of petitions arising from cyber-fraud allegations, in which the petitioners' bank accounts had been debit-frozen on the basis that part of the fraudulent amounts had been credited to them.

The Court noted that in many cases, even the communication allegedly sent by the investigating agency to the banks was not placed on record, raising doubts about how the banks acted at all. The Bench permitted petitioners to seek compensation for such unlawful freezing, wherever appropriate.

The Court relied extensively on the Kerala High Court's decision in Headstar Global Pvt. Ltd. v. State of Kerala [CRL. MC NO. 3740/2025 decided on 2/6/2025], which analysed Section 106 and Section 107 of the BNSS in the light of earlier Supreme Court decisions, such as State of Maharashtra v. Tapas D. Neogy [(1999) 7 SCC 685].

The Kerala High Court had held that while Section 106 (like old Section 102 CrPC) permits seizure of property for evidentiary purposes, it does not authorise attachment of bank accounts. Attachment of proceeds of crime must follow the structured process under Section 107, which requires the investigating officer to approach the jurisdictional Magistrate, who alone can pass orders of attachment after hearing all concerned parties.

“… the Kerala High Court, in clear terms, held that a police officer investigating a crime has to approach jurisdictional Magistrate under Section 107 of the BNSS to seek attachment of any property believed to be derived directly or indirectly from a criminal activity or commission of an offence. Subsequent course will have to be adopted in terms of order passed by the Magistrate,” the Court observed.

Applying these principles, the Bombay High Court held that debit freezing of bank accounts amounts to attachment and therefore cannot be carried out under Section 106. It further noted that the Supreme Court had refused to interfere with the Kerala High Court decision, thereby settling the legal position.

The Court also referred to the “Citizen Financial Cyber Frauds Reporting and Management System” issued by the Ministry of Home Affairs, which permits banks to put disputed amounts on lien based on complaint acknowledgement, but expressly does not authorise debit freezing of accounts.

Accordingly, the High Court quashed the debit-freezing orders passed under Section 106 in all petitions and clarified that any attachment of bank accounts must strictly follow Section 107 of the BNSS. The petitions were disposed of in these terms.

Case Title: Kartik Yogeshwar Chatur v. Union of India & Ors. [CRIMINAL WRIT PETITION NO. 321 OF 2025]

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